I’m a big fan of the Marvel Cinematic Universe. It’s my nerdy guilty pleasure and a great way to connect with my kids as we talk about our favorite fan theories around what happens next. Over the past few months, I’ve seen more and more parallels between InsurTech and how Marvel has unveiled and built upon their projects. If you’ve seen me out in real life recently, you’ve no doubt had to suffer through my rambling theory about the “InsurTech Avengers.” We’ll get to that, but I want to talk about what some have (I believe) mislabeled as InsurTech 2.0- this is InsurTech Phase 2.
Like Marvel, the Phases of the InsurTech Universe (from now on the ITU) had to build on each other, and things have to happen in a certain order to develop characters and backstories. Without watching Ironman, it’s hard to understand Tony Stark’s evolution and motivation in End Game, right? The same work needs to be done in the insurance saga. It’s also worth noting that I am really only looking at the Commercial P&C ITU and like Marvel’s Multiverse, the ITU has Life, Health, Personal Insurance, Reinsurance, IoT, and countless others, but I’m going to stick to what I know best. Let’s start with a real quick recap on the first phase, as I see it.
Phase 1 – Individual Development and Origin Stories
Going back to 2015 and before, you see the origins of InsurTech start to emerge. Humble, but important and critical steps are taken that have lasting effects on the path that individual carriers and startups walk for years to come. Like Tony Stark working away in a cave in the desert, we see carriers start to look at their own backend systems and start building crude, but effective, tools like predictive analytics and early machine learning. It had to start here with progress on Predictive Analytics as this lays the groundwork for automated underwriting which is pivotal in the evolution of the API movement coming on the horizon.
Carriers also make decisions in this first phase that change and define their paths within the InsurTech Universe. Some come out of the gate quickly, but they go alone. Building from a single quoting website, as opposed to deploying APIs that can be anywhere- and everywhere. The early players in this space draw to mind the old saying – if you want to go fast, go alone, if you want to go far, go together. A few jump out, but are unknowingly running towards a dead end.
As carriers are busy trying to figure out the best way to invest in insurtech and making some headway, agents and brokers continue working, mostly unaware of what’s been happening in the background. Slowly, though, they begin to see carriers introducing new processes for submitting applications and claims, but these are almost entirely stand-alone isolated systems. They are critical to the evolution but like the early Thor movies, they don’t excite too many and don’t do a lot to move the story forward.
The challenge that carriers and some agents and brokers saw was that the advancements just weren’t that exciting on their own. In hindsight, we can see how this all plays together, but early on, it’s hard to see real progress with one-off portals.
Phase 1 ends with introducing our cast of characters, sets the tone for the movement but leaves us with a lot of loosely connected pieces. Those paying attention start to draw lines between and these lines are what push us into Phase 2.
What’s great about Phase 1 is that it isn’t obvious until later how some of these pieces plug together and how great some of them really are. Like irreverent comments about Infinity Stones, some of the seemingly smaller pieces are just being set up for more critical roles in the coming Phases.
Phase 2 – The team-ups
Phase 2 starts to get interesting. Little clues left in Phase 1 start to come together and we see that this isn’t just a random collection of players, there is a bigger vision here. Marketplaces emerge that start to put these APIs together.
In the MCU, the Avengers all of a sudden feel very obvious, and the idea that their ranks grow makes total sense. In the InsurTech Universe, players who went alone in the Cyber Insurance space started teaming up with others in the broader P&C space. Those working on projects like insurance certificates, loss run process, and yes, even embedded plays start to see that, while they might be able to tackle small problems in their own debuts by themselves, the bigger problems are going to require bigger partnerships.
Carriers who built flexibility into their strategies now see an opportunity to distribute further than they ever could on their own. Team-ups with other carriers that would have sent chills through the boardroom five years ago, now seem like a reasonable way to grow premium.
At this point, we are firmly in Phase 2 of the InsurTech Universe. Original players are getting help (either through partnerships or deeper M&A or investments) from new entrants. And the “new guys’ ‘ aren’t that new. Those that survived have emerged battle-tested, stronger, and smarter for the experience. And people understand who does what and more importantly, who does what well.
I won’t out others here by name, but I know from many conversations that partnerships and team-ups are how we all move forward for the better of the industry. I will, however, speak directly to Talage’s strategy, and we have known for a while that we can’t do this alone. There aren’t many InsurTechs or Carriers within the ITU that we haven’t talked to and haven’t explored partnerships with.
For InsurTech to survive and thrive, it needs to become ubiquitous with insurance itself. It’s time to move on from what’s InsurTech, and what’s not. We need to understand and accept that this is our industry. We’re in this together – the carriers, brokers, and agents. Ultimately, the policyholders who we serve, don’t see it differently. To them, it’s all just insurance.
We don’t think of FinTech every time we use an ATM, do we? It’s just banking. It’s time for all the players in automation, claims, loss control, lead generation, data analytics, Submission Management, and payments to stop seeing this as InsurTech and start seeing this as Insurance because that’s what the end users see. As integrations into and from core systems expand we are all only as strong as our weakest link. Now is when the ITU teams up to take on the bigger fights. Phase 2 is in full swing, it’s time to assemble.
What’s phase 3? – the End Game?
Of course, End Game is far too dramatic, but I’m on a roll. Where does this go from here? Insurance has long held onto big visions. “We want to be where our policyholders are,” “We want to quote with just a phone number,” “We want to automate the renewal cycle from carrier to policyholder with zero interaction.”
These are statements I’ve heard from every top executive I’ve had conversations with- hell, I’ve said them myself, but we have to understand that we need the foundation on which we build these tools.
In the MCU, if we all got dropped in space in a fight scene against Thanos, nobody would have a clue what was going on. We wouldn’t see the evolution, we wouldn’t see why some characters rise above, we wouldn’t root for our favorites and frankly, we wouldn’t believe it.
The tech is close. It’s making leaps and bounds and is evolving faster than other FinTech sectors. But Phase 3 is on the horizon. Partnerships are being forged that will bring about the realization of these big, broad ideas. But there are more ideas, more partnerships that we haven’t even thought of yet. And there are some storylines that are still yet to play out.
I have never been more excited to be a part of this industry and for Talage to be doing its part to drive it forward. This is no small feat, InsurTech- no, Insurance- is pushing boundaries and moving an industry ahead against 200 years of regulation, tradition, and frankly baggage, to bring a new, better future to insurance for carriers, brokers, agents, and policyholders. InsurTech Forever.